Lean for Small Business

Small Business is the life blood of most economies yet fantastic tools like Lean haven’t really taken root there yet. Sure there is Lean Start-up which is fantastic for low to no capital start-ups that want to test what products will sell in the market place but what about the business that is out of start-up but isn’t big enough to have mature systems and processes? We talked about the different phases of growth and what tools are applicable in each phase of growth. Lean is all about how to generate a higher percentage of value creation vs. waste in a business and while Lean was founded by businesses in Phase III and Phase IV growth, the concepts are still applicable to businesses that aren’t that big yet.

Small business for our sake is going to be defined as a business that is anywhere from $300,000- $3.3 Million in revenue for service based businesses and $1 Million -$10 Million for a manufacturing business. These businesses typically have a hard time with either sales or infrastructure. One usually will outpace the other and it’s a constant game of cat and mouse. You’ll run into problems like departments not talking to each other, items falling through the cracks, and feeling like there isn’t enough time in the day to get everything done. In these companies we usually see two main problems come up.

Not enough time to get all the work that needs to be done completed

Delegation is difficult

In a phase II business what we notice is that standard work is king to help remove the waste of overburdening. In conjunction with standard work you also want to make sure that the leadership team can manage. Most business owners at this stage aren’t good managers but are good sales people so they can sell but they have a hard time being able to let go. What The Lean Way has noticed is that there needs to be a set of tools that are unique to phase II businesses that help them overcome some of their internal management wastes. Usually coaching and mentorship programs are very helpful and in addition to that we propose a waste that isn’t a traditional waste. We propose the waste of over utilization of people. If you don’t take time for reflection then you are burning out your people and your company, not to mention you also aren’t getting a chance to really think through challenges and you’ll work many more hours than you probably want to work. Reflection can be doing a mindfulness practice, time to just think, or any sort of down time.